When growth stalls, many managers decide that the answer to the slowing metrics is in going global. In many instances, managers don’t appreciate the inherent risks, miss the cultural nuances, and miscalculate the legal costs of the lofty goals globalization requires.

In your book, you say that one of the biggest problems with globalization is managers and their unbridled optimistic attitude. How does this increase risk?

The problem is that managers systematically overestimate the benefits of globalization and underestimate its costs. They tend to believe that globalization is relatively easy, and they therefore overlook the economic, political, and cultural risks involved.

Many people cite Thomas Friedman’s book “The World is Flat” as an urgent call toward globalization. What’s usually wrong with this thinking?

More and more research suggests that the world is less global than Friedman suggests, and not just by a little, but by a lot. And so if managers base their views of globalization on Friedman’s work, they will end up making very dangerous assumptions about globalization’s risks and challenges.

Why is overestimating market potential so prevalent?

It is prevalent because managers tend to think that consumers will respond to their company’s products similarly in every market. They therefore believe that they can simply port their existing business model to global markets with little change. In this respect, they fail to recognize the challenges that culture—in the form of different consumer cultures—can place on their business model.

Your research led you to the conclusion that “culture is probably the least understood.” Tell us more about the importance of culture and its role.

Culture is the least well understood of all of globalization’s challenges because culture is difficult to define and measure. Is culture about language differences? Yes. Is culture about religious differences? Yes. Is culture about differences in behaviors, norms, customs, and social structure? Yes. But even if we recognize these differences across countries, they are difficult to quantify and measure. Because culture is difficult to quantify and measure, managers end up discounting its effect on globalization. In my book, Global Vision, I discuss how culture impacts globalization and also how managers can quantify the impact of culture on global companies.

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Culture is the least understood of the challenges of global expansion.

Recently, I had the opportunity to talk with Larry Light about his new work. Larry is the CEO of Arcature LLC. He was a senior executive and board member at BBDO and President of the international division of Ted Bates. He was Global CMO of McDonald’s from 2002 to 2005. More recently, Light was the Global Chief Brands Officer of IHG.

Bad Habits That Inhibit Brand Building

Would you share the bad habits that inhibit brand building? I found myself nodding and think readers would find these compelling.

We identified 15 bad habits that impede organizations from building brands, regardless of industry, category, and geography. These habits are not stand-alone forces: there are two underlying connections among these, and these are enterprise culture and leadership. First, culture matters. When there is a conflict between culture and strategy, culture wins. Culture fights change. Culture fights for the status quo. Culture nurtures complacency. Second, brand leadership is different from brand management. Brand management is taught in business schools. Effective brand leadership is different. Brand management is about the execution of specific brand-building actions. Brand leadership is different. It is about getting the right results through the efforts of others. It is about educating, inspiring, influencing and evaluating. Effective leaders create results by getting others to do the right things to produce the right results. Effective brand leadership is top down. For example, none of the work we did at McDonald’s could have happened without the leadership of Jim Cantalupo and Charlie Bell. Nissan needed Carlos Ghosn. IBM needed Lou Gerstner. Popeye’s needs Cheryl Bachelder.

15 Bad Branding Habits

Focusing on Customers You Do Not Have at the Expense of Customers You Do Have

Failing to Keep the Brand Relevant

Price Segmentation Instead of Market Segmentation

Thinking the Lowest Price Is the Same as the Best Value

Failing to Instill a Quality Mind-Set

Silo Mentality

Focusing on the Short-Term Rather Than Creating a Short-Term/Long-Term Strategy

Not Sharing Across Functions, Geographies, and Brands

Believing the Regions Are Not as Sophisticated as the Center

Believing That Brand Management Is All About Marketing Communication

Allowing Data to Decide

The Most Insidious Bad Brand Building Habit

What’s the most common bad habit you have witnessed?

One that is becoming increasingly visible and insidious is the desire to satisfy the demands of Wall Street over satisfying the demands of customers. Ultimately, the sustainable source of cash flow comes from customers exchanging money for your offer. Financial engineering is not the basis for enduring profitable growth. Managing money is not the same as managing brands. Stock buybacks and increased dividends indicate that a company believes that investing in product and service development, innovations and brand-building will not yield satisfactory returns to shareholders. So, they just give cash back to shareholders and let them decide where to invest.